(Bloomberg) -- Gold rallied above $1,700 an ounce as a concerted global rush into havens intensified, with the upswing driven by turmoil in the oil market, the spread of the coronavirus, sinking equities, and expectations of easier monetary policy as recession risks loom ever larger.The precious metal hit the highest level since 2012 as Brent crude collapsed at the start of trading in Asia, while futures on the S&P 500 Index sank more than 4%. Investors have already driven holdings in bullion-backed exchange-traded funds to a record as the coronavirus slammed the outlook for growth.The traditional haven has sprinted higher this year, following an 18% surge in 2019, as the global health crisis expanded and central banks cut interest rates to try and stem the damage. Gold has immunity to the virus, according to Goldman Sachs Group Inc., which dubbed the metal as the currency of last resort and predicted that prices could top $1,800 an ounce.“There’s a clear rush to safe-haven assets at the moment and gold’s a major beneficiary,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. Markets are concerned that “we could see a more ugly situation before things get better, which of course is good news for gold,” he said.Spot gold surged as much as 1.8% to $1,703.39 an ounce, the highest since December 2012, and traded at $1,694.54 at 8:33 a.m. in Singapore. The gains came as 10-year U.S. Treasury yields plunged below 0.5% to a record low amid the stampede for safer assets.The U.S. and Europe now face the “distinct possibility” of technical recessions in the first half as the outbreak hurts demand and supply, and drives investors to safe havens, according to Pacific Investment Management Co.’s Joachim Fels. Over the weekend, Italy locked down a swathe of the nation.Even after the Federal Reserve implemented an emergency rate cut last week, there are forecasts for more easing, which would benefit non-interest bearing gold. In addition, investors will track this week’s scheduled policy meeting of the European Central Bank.The surge in bullion prices is boosting miners’ shares. Newcrest Mining Ltd., Australia’s largest gold producer, rose more than 4% in Sydney, while Northern Star Resources Ltd. climbed 2.1%. The gains came as broader equity benchmarks saw significant declines.Among other main precious metals, silver was flat, while platinum fell 1.1% and palladium dropped 2.5%.To contact the reporter on this story: Ranjeetha Pakiam in Singapore at rpakiam@bloomberg.netTo contact the editors responsible for this story: Phoebe Sedgman at psedgman2@bloomberg.net, Jake Lloyd-Smith, Keith GosmanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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